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Big Data = Chief Data Officer?

by Peter Sondergaard  |  August 15, 2013  |  11 Comments

There is an enormous new revenue opportunity for CEOs of asset-intensive industries to extend the value of existing products by unlocking and monetizing the data they create.

Got your attention?

Consider this example: An elevator company packages and sells the data it collects to landlords. An elevator company? Collecting data? Selling it? Talk about thinking outside the box! (Sorry, couldn’t resist.)

Think about it. The elevator company tracks how many people access each company on every floor in the office buildings it services. Once it pairs that information with publicly available financial data for those companies, the elevator company can then advise landlords on which companies will likely require additional floor space due to growth. On the flip side, the elevator company can alert the landlord about declining traffic to a particular office. If that information correlates with a decline in financial performance for that firm, it provides a warning signal that the tenant might be at risk of defaulting on or not renewing their lease. Insight like this is worth a lot of money to landlords.

How did the elevator company come up with the idea for this new product based on an existing asset? It wasn’t a spontaneous “aha” moment. It was the result of focused innovation.

Enter the chief data officer (CDO). The CDO’s job is to find new digital revenue from existing physical assets. The CDO guides the organization from not knowing what they don’t know about the data locked in their assets to actually doing something about what they know.

And I already know what you’re thinking. Another “chief of this and that?” Another title du jour that CEOs are expected to fund? Actually, no, not this time.

The CDO is actually best placed in direct support of executives already responsible for product development. That way, the CDO’s focus is locked squarely onto a specific asset or product. The CDO can unlock the value of data or information from the product or information that is related or valuable to the product. The CDO should also collaborate with peers throughout the organization to help the existing product development teams do what they do best: develop products.

Contrast this to the predicament that a shiny new CDO would encounter if reporting to the CEO: a hostile C-suite of peers resentful at the prospect of losing another source of innovation and revenue to the new-fangled title on the other side of the boardroom table. This all-too-often spells trouble, heartache and, frankly, disaster.

We advise CEOs to empower existing product leadership teams with focused talent that can find new sources of revenue from their assets, rather than set up another isolated C-level player who may fail in a power struggle for access to data.

Even though we recommend that CDOs, in most situations, should reside within the business units, CEOs must be actively involved in developing the priorities and objectives of the role. The CEO is ultimately responsible for the digital strategy of the organization and responsible for unlocking the corporate value of information in the organization. The CEO must own and drive the digitalization of the organization.

All this begs the obvious question from the CEO: I thought we were supposed to hire a chief digital officer? Is this some kind of CDO-bake-off? I’ll explore this in my next post.

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Peter Sondergaard
Senior Vice President and Global Head of Research
25 years at Gartner
29 years IT Industry

Peter Sondergaard is a senior vice president in Gartner, where he is the global head of Gartner Research. Mr. Sondergaard is responsible for people management and the direction of the global research organization, which includes Semiconductors, IT Infrastructure and Operations, Communications, Software and Services Management, Business of IT, Research Operations Management, and IT provider and end-user organizational roles.


Thoughts on Big Data = Chief Data Officer?


  1. Marco Russo says:

    I agree with the concepts expressed in this post, except for the title. Big Data is not directly related with the idea of collecting and selling data, in fact it is named only in the title. But if the Big Hype can help pushing investments in that direction… then the hype is welcome!
    Now, going to the matter of getting revenues from company’s data. Where is the value? Is it in the raw data (elevator’s runs,) or is it in the derived information (increasing/declining traffic, peak bottlenecks, most requested floors, … ?) Can the derived information be obtained by just looking at elevators data, or should it require other information not owned by the elevator company? Probably, someone who has domain knowledge (about building properties, facility management and so on) can extract more information by analyzing heterogeneous data.
    I think there is a market for raw data, and this could be the place for big data. But there should be someone that act as a broke and provide also added value on raw data (such as KPI, trends, interpretation.) I think there is a wide-open space here, existing marketplaces are still too small and fragmented (see datamarket.com and Azure Data Market), with a random mix of raw data and results of other analysis. I think we are still not even near to the world in which data is the new oil. Maybe we have the oil, but we still do not have the refineries.

    • Peter Sondergaard says:

      Good point. I think the information or data about the elevator, is important from the perspective of a more effective and efficient elevator. Financial information about the companies renting the floors is important from a perspective of understanding how they are doing. Combined you get something which neither streams of independent data can do. This is the added value for the property owner and additional service revenue for the elevator manufacturer. 1+1=3

  2. Peter Aiken says:

    Hi Peter – great topic and argument – I’ve a new book that focuses singularly on making this case for this position and I’d be interested in your (and others opinions):

    http://www.amazon.com/The-Case-Chief-Data-Officer/dp/0124114636/ref=sr_1_1?ie=UTF8&qid=1369924639&sr=8-1&keywords=chief+data+officer

    best regards,

    Peter Aiken

  3. Ian Head says:

    We will watch the secondary opportunities the digital economy inevitably produces. Individuals will ride up and down your elevators (for a fee) so your company appears to be a more attractive tenant and can therefore negotiate more strongly with the landlord.

    Every opportunity to gather such data raises an opportunity for others to manipulate it. There’s plenty of “get to the top of google searches” services .

    Michael Sandel has many such examples of unexpected markets emerging in “What money can’t buy: The moral limits of markets”. Such as the that US felons can pay to upgrade their prison cell.

    We can watch as the law of unexpected consequences unfolds.

  4. Tim Wirth says:

    Peter,

    Thank you for a great case regarding the value of data generated by every company.

    Your piece triggered 2 different thoughts and comments.

    1) Why would the CIO couldn’t become this CDO?

    The CIO is currently managing the existing data and appications. But is he thinking out of the box enough? Is the CIO in tune with the details of the business? Is he agile enough with alternative buisness models? I can see many different answers there depending of the company. I believe several CIO too busy with the IT details and cannot create a new Big Picture…

    2) This leads to my second thought regarding what could be an ideal profile for the CDO. Ideally, the CDO should have the qualities of an (Internet) Entrepreneur: ability to think out-of-the-box, identify new assets within existing value chain (i.e. Data), ability to develop new value chains across other industries, ability to build a business case/plan, develop the services marketing plan and related operational plan.

    Therefore, to your point Peter, he should be the CEO (if the CEO is an entrepreneur). 😉

    • Peter Sondergaard says:

      Hi Tim,
      I do think the CIO could become the CDO. And some have already. But it will require a different focus and added skill set, which many CIOs don’t have today. I am seeing an increasing number of CIOs focus on this, both in North America and Europe. But to your point it requires them to delegate the operational elements of IT more to their organization.
      As for mimicking of entrepreneurs, that would be valuable. Provided that they can from a skills perspective span both digitalization and operations. The most successful CIOs, can discuss details of mobile application programing in one sentence and digitalization’s impact on the share price in the next.

  5. Hi,
    From my point of view, Marco has one of the points. The data from the elevators are one of the data stream from which you can (maybe) infer something interesting and possibly valuable. Think of other clues of activity ; electricity, AC, bandwidth…
    Available in bigger volume, the raw data are useful (and often already used) for the elevator company, its contractors… to design better maintenance programs, better products… But do we talk about big data or simply data leading to more rational décisions ?
    About the role of the CIO, we (the French CIO association which I chair, http://www.andsi.fr) think that the analysts which will extract insight from the data (the “infer” side of the job) should work very closely with the experts of the firm’s data, usually the people in charge of the Datawarehouse (http://www.andsi.fr/tag/chief-data-officer ).
    This pushes the case of the CIO being the first CDO, and may be staying the one who fosters « data informed décisions » among its C-level colleagues (cf. http://www.oecd.org/sti/ieconomy/Session_3_Delort.pdf#page=13 ).

  6. Jon Bloom says:

    I believe the Chief Data Officer is the next progression of the Information age, to bridge the gap between IT and the Business and manage the process of turning Data into Information. http://bit.ly/1cH2Rqq

  7. […] physical assets,” wrote Peter Sondergaard, global head of Gartner Research in an August 15 blog post. “The CDO guides the organization from not knowing what they don’t know about the data […]

  8. Mark Hirsch says:

    This is a great discussion. But why is the focus solely on the physical assets? Why not the data produced internally by a company’s most precious assets? It’s employees.

    Employees produce tremendous volumes of relatively untapped data just by doing their jobs. This data can be mined to automatically improve efficiency, capture more revenue and generate better business intelligence. (Full disclosure: I am CEO of CreativeWorx, a company focused on automatic data capture and BI processing. http://www.creativeworx.com)

    Leveraging internal employee workflow data is an obvious overlap of the CIO and CDO roles, and an area that companies must embrace to remain competitive.

    • Peter Sondergaard says:

      Hi Mark,

      The intent was certainly not to exclude internal data including as you state the data or information generated by associates of organizations. The point of physical asset focused industries was to high-light these as opposed to using examples that are more common in digital asset focused industries such as the music industry or banking for that matter of fact. Again, the intent was not to exclude but shine a light on the broad impact of digitalization.



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